Apple's 10K reveals higher R&D, more key suppliers, warns of lower margins

Apple published its latest 10K financial statement through the SEC late yesterday afternoon, confirming a decline in iPod sales, an apps-driven increase in iTunes revenues, and many more fascinating tidbits from behind Cupertino’s secrecy wall.

The company achieved 54 million iPod sales (down one percent) during its last financial year, accruing $8.091 billion (down 12 percent). As you can see, revenue fell more than unit sales, reflecting lower selling prices, though shored up by the slightly pricier iPod touch devices.

Each iPod sale brought $149 in for Apple, down 11 percent from $167 in 2008 due to lower prices.

iTunes keeps on rolling, with the company confirming “double digit” growth in all regions, boosted, according to the management discussion, by: “Heightened consumer interest in downloading third-party digital content and applications, continued growth in its customer base of iPod and iPhone customers, the expansion of third-party audio and video content available for sale and rent via the iTunes Store, and the continued interest in and growth of the App Store.”

Music-related products and services, which do include Apps and video, bought $4.036 billion into the company’s coffers. That’s up 21 percent ($696 million).

Lots of activity in Apple’s supply line, also, with a host of new suppliers for the company’s expanding product offering and a couple of major payments confirmed to secure strategic component supply.

Apple pre-paid $ 500 million LG Display for LCD displays, that’s in addition to the $500 million it paid Toshiba for flash memory supplies.  That bought the 27-inch iMac’s revolutionary screen.

If you’re concerned Apple may stop innovating, don’t be, R&D spend climbed once again, up 20 percent ($224 million) for a total $1.3 billion. Snow Leopard development apparently cost the company $71 million.

Apple spent $501 million on advertising in 2009, up from $486 million in 2008 and $467 million in 2007. Apple boss Steve Job’s jet plane only cost Apple $4,000 in the financial year, as against $871,000 in ‘08.

Apple Store revenue per store is now $ 25.9 million ($ 29.9 million in 2008), with 16,500 full time equivalent employees. Over half of all stores scheduled to open for business in 2010 will be international.

US sales accounted for 54 percent of Apple’s mix, down from 57 percent in FY08. International sales continue to climb, hitting 46 percent.

Interestingly, there’s 900,678,473 Apple shares out there in the hands of 30,573 shareholders.

Some may be interested to know that $100 invested in company shares in 2004 would now be worth $957, the same cash invested in the Standards and Poors 500 would now be worth, erm, $105.

Apple also names a series of component suppliers and manufacturing vendors whose loss to the Company if they were to encounter financial distress or become insolvent, incur capacity or supply constraints, become unable to obtain credit, or for any other reason could materially adversely affect the Company’s business and financial condition.

These include: 3M Co., Advanced Micro Devices Inc., AKM Semiconductor Inc., Amkor Technology Inc., Analog Devices Inc., Aptina Imaging Corp., ARM Holdings PLC., Atheros Communications Inc., Atmel Corp., AU Optronics Corp., Avago Technologies Ltd.,Broadcom Corp., Cirrus Logic Inc., Corning Inc., Cypress Semiconductor Corp., Dover Corp., Flextronics Inc., Foxconn Technology Co. Ltd., Hon Hai Precision Industry Co. Ltd., Imagination Technologies Group PLC., Infineon Technologies AG, Intel Corp., Inventec Appliances Corp., LG Display Co. Ltd., Linear Technology Corp., MagnaChip Semiconductor Corp., Maxim Integrated Products Inc., Mitsumi Electric Co. Ltd., Murata Mfg. Co. Ltd., National Semiconductor Corp., Nichia Corp., NVIDIA Corp., NXP B.V., OmniVision Technologies Inc., Quanta Computer, Inc., Pegatron Corp., Philips Lumileds Lighting Co., Renesas Semiconductor Co. Ltd., RF Micro Devices Inc., ROHM Co. Ltd., Samsung Electronics Co. Ltd., Skyworks Solutions Inc., STMicroelectronics NV, Sumitomo Chemical Co. Ltd., Texas Instruments Inc., Toshiba Corp., Toyoda Gosei Co. Ltd., and TriQuint Semiconductor Inc.

Expect margins to decline: “The Company expects to experience decreases in its gross margin percentage in future periods, as compared to levels achieved during 2009 and 2008, due largely to the anticipated impact of product transitions, flat or reduced pricing on new and innovative products that have higher cost structures, both expected and potential future cost increases for key components, a stronger U.S. dollar and higher logistical costs.

Thanks to: Setteb.it